Stocktrak Report

Only available on StudyMode
  • Download(s) : 749
  • Published : December 16, 2012
Open Document
Text Preview
Monday, September 10, 2012, I started Stock-Trak, an online portfolio game. Stock- Trak allowed me to gain hands on experience testing different investment strategies in a risk-free, yet realistic environment. From September 10 to November 16, 2012, I took part in one such simulation by managing an online Stock-Trak portfolio. I was given an initial amount of $100,000 pretend cash with which to invest. All monetary decisions were at my discretion. This paper discusses my trading experience , my portfolio’s performance, the strategies used during the simulation, what I learned in the process, and how I will implement the knowledge gained from the simulation in future investments. a.How much previous experience trading stocks do you have?

Unfortunately, prior to this course I did not have any experience in trading stocks. I was not interested in learning or buying stocks, therefore my interest level was a zero. b.What is your interest level and why?

I did not have much interest in trading stock, because it seemed complicated, confusing and boring, and I live on a fix income and did not want to invest money I barely have. c. Goals for this exercise

Since, I had no experience in trading stock my primary goals were to learn the basics of trading stocks such as; what the stock market is like and how all the pieces fit together and gain the experience.

II.Investment Philosophy

a.Investor Assumptions:

Risk tolerance

My risk tolerance was a seven, because I wanted to maximize my diversification and allow my money to invest overtime. Nevertheless, having a high-risk tolerance will allow me to reach my financial goals. ii.Financial goals/purpose

My main question when focusing on my financial goals was, “What am I trying to achieve through investing (or trading)?” I concluded that I wanted to attain long-term wealth. In correlation to my risk tolerance, I came up with three important financial goals for my reason towards trading stock. My first financial goal is to pay back my student loans, secondly have money for retirement, and finally be able to pay for my children college funds. The goals I set were based upon extended time to accomplish them. iii.Time horizon

My time horizon for my financial goals is 30 years. This time horizon allows me more aggressive with my long-term wealth. The benefits of having a long-term horizontal is that, I can focus on the gradual future and slow results with a disinterest for the shorter view of my investments. b.Market Status and Assumptions:

i. Current level – what is the S&P500 at today
Early September the S & P 500 was 1,410.49.
ii.Time of market – bull vs bear
Considering this S&P 500 the market was a bull sign, in which it was trading above its moving average, rather than below. According to an article on the “ The Digerati Life” by Tim P recommends , “when the market time is a bull increase your percentage of high beta stocks, watch for sectors that may not be participating in the bull market and good historically bull market stocks are Apple, Deere and Nike.” Therefore, I planned to use the bull to my advantage when I brought stocks. iii. What are experts/media saying

The U.S. economy was/is going through an economic recession that has been proceeding since the middle of 2008, which has contributed in producing a global economic downturn. According to the experts and the media, we are still recovering from 2008 recession crisis, and unemployment is at a very high percentage. The economy was very much depending upon the 2012 presidential election to get a sense of where we will be for the next four years (The Digerati Life). Others are saying that the economy remains soft, but not as weak as some people were anticipating. On the other hand, an article in the NY Times states that even though growth in jobs and the overall economy had weakened the recovery of the economy is still weak ( New York Times). According to Representative Paul D. Ryan “The...
tracking img